The most recent CFTC's Committment of Traders report showed that net-short Japanese Yen positioning increased to 65K contracts from 61K contracts, a curious development during what has been a respectable rally by the Yen in May. In context of the Bank of Japan's decision last night, evidence is building for a major Yen turn around.

In Japan, where food and energy prices are soaring and wage growth is stagnant, consumers are recently dealing with another shock to their purchasing power - the VAT hike in April. Accordingly, with the explosive Q1 GDP figure in their back pocket (+5.9% annualized), Japanese monetary officials have decided that the country is well on its way to achieving the +2% inflation target previously outlined.